Friday, October 31, 2014

A 1953 Debate Between a Libertarian and a Liberal Part 1

Just finished reading the debate between a libertarian and a liberal from "Faith and Freedom" published in the months of April and May 1953. Dr. John C. Bennett represents liberalism who served as a professor of Christian theology and ethics at Union Theological Seminary. Rev. Edmund A. Opitz is the libertarian who headed the regional conferences of "Faith and Freedom." The style of the debate is in the form of a personal letter. It has two parts. In this aticle, I just want to summarize the gist of their positions.

Rev. Opitz had the privilege to introduce his position first. The sum of what he said is divided into four parts: mental adventure, indoctrination, the unknown case, and the basic question.

Under mental adventure, Rev. Optiz mentions that the pronouncements of church councils about "planned economy, or a welfare state, or socialism, or a mixed economy" are not attractive to him. For him, the recommended solutions are "nothing but an articulate form of the disease: government force against persons to cure the evils caused by prior political intervention."

Turning to indoctrination, the kind of doctrine Rev. Opitz refers to has something to do with the idea that the government is perceived as a "proper and efficient means to accomplish the end of general prosperity and security for individuals against the uncertainties of modern life." This was achieved through the propagation of the "social gospel or the welfare state idea." Seminarians did not have the opportunity to listen to an alternative concept. As a result, seminarians believed that "genuine concern for his fellows and for the good of society would lead a man to embrace the progressive extension of the functions and controls of government." And anyone who resisted this program was considered selfish.

The unknown case pertains to the absence of awareness of the seminarians about "classical liberalism", which "has long roots in the past and an impressive literature, and that it has a strong moral and intellectual case." Students never learned this in their formal education. Instead, what was taught was a "caricature" of the philosophy. However, based on the experience of Rev Opitz, after perusing the books of "social gospellers and the welfare-staters," and after talking to Dr. Bennett and other men who were "professionally engaged on one or the other of the various church councils for social action," he realized that the reason why the "libertarian case" was not taught in the seminaries was because the theological circles were not aware ot it.

The basic question is related to "Christian judgment" about the limitation of the power of the government. But before he mentioned it, Rev. Opitz showed the difference between the state and the society, and in what way can the state serves the society: "The business of society is peace; the business of government is violence. So, the question is: What service can violence render to peace? The libertarian answer is that violence can serve peace only by restraining peacebreakers."

Dr. John C. Bennett 

As a response, Dr. Bennett identifies at the outset the difference of his "presuppositions" from Rev. Opitz. It was his intention to clarify few misunderstandings by explaining three subjects: limited government, the essential element, and the main issue.

Dr. Bennett believes in limited government. Basic to his idea is the difference between the state and the society. And since the society is composed of different kinds of associations, "swampint the life of all other associations by the state is one of the greatest, perhaps the greatest, evil of our age." He assured Rev. Opitz that they are one in opposing the growth of a totalitarian state.

For Dr. Bennett, it is misleading to say that the essence of the state is found in coercion or violence. He emphasizes the need of society for the state "to preserve public order." In addition, he also believes that the state exists to serve the purposes of the society, and many of these purposes do not require the use of "coercion" or "violence." And then he identifies the means to limit the power o the government:

"The state should be limited by its own law which protects the freedom of minorities, of individuals, of many kinds of association. The state should be limited by the recognition on the part of the citizens that there is a law above the state and above the national community as well. The state should be limited by a pluralistic structure within the state itself, with division of powers, the independence of the judiciary, the recognition that functions should be distributed between various regional political units."
About the essential element, it has something to do with the provision of "educational opportunity" to children. To achieve this requires coercion in relation to taxation. However, this coercion in not the essential element in education. It is bettter perceived as the "constructive function" of the state.

In the last subject, "main issue", Dr. Bennett identifies the basic difference of his position from Rev. Opitz about the relationship of the state to freedom: "I think that the chief difference between us is that you regard the state as the chief enemy of freedom in all situations whereas I believe that the state may be an instrument of freedom for its citizens."

Dr. Bennett accepts that freedom has many enemies that only the state can effectively stop them. Among these enemies, he singled out the "business cycle", which to him is a kind of "coercion that results from the blind working of economic processes." When this happens, the state must do something to prevent economic depression that will save people "from the tyranny of circumstances that are beyond their control as individuals." This is a necessity to prevent the emergence of totalitarianism for based on history, this dictatorial tendency occurred not "through the gradual expansion of the functions of the state", but through "catastrophes that are the result of the failure of weak states to deal adequately with the problems of the people."

As a warning, Dr. Bennett mentions that the policy followed by Rev. Opitz and his group is actually "indirectly" helping in the rise of totalitarianism that he resents. For the professor, the idea of Rev. Opitz about the state will create a "vacuum into which the advocates of totalitarianism may move."

Dr. Bennett concludes his message:

"It will require very great wisdom which is free from the dogmas of the right or the left to enable our country to steer a course in the next period that will use the state to help people preserve freedom from the tyranny of circumstances and from the tyranny of private centers of economic power without over-extending the activity of the state, especially without overcentralizing it."

A 1953 Debate Between a Libertarian and a Liberal Part 1 (Tag-lish Version)

Katatapos ko lang basahin kahapon ang debate ng isang liberal at isang libertarian sa "Faith and Freedom" na nilathala noong mga buwan ng Abril at Mayo taon 1953. Ang liberal ay si Dr. John C. Bennett na naging propesor ng Christian theology at ethics sa Union Theological Seminary. Ang libertarian naman ay si Rev. Edmund A. Opitz na siyang namuno sa mga conferences ng "Faith and Freedom." Ang istilo ng debate ay sa anyo ng liham sa isa't-isa. Ito ay may dalawang bahagi. Nais kong buudin ang nilalaman ng kanilang mga posisyon sa artikulong ito sa pamamagitan ng pagpili ng mga punto na sa tingin ko ay pinakamahalaga. 

Rev. Edmund A. Opitz

Unang nagsalita si Rev. Opitz. Ang buod ng kaniyang sinabi ay maaaring hatiin sa apat na mga punto: mental adventure, indoctrination, the unknown case, and the basic question.

Sa mental adventure, binanggit ni Rev. Optiz na walang dating sa kaniya ang mga pronouncements ng mga church councils na may kinalaman sa "planned economy, or a welfare state, or socialism, or a mixed economy." Para sa kaniya ang mga lunas na binabanggit ng mga church councils ay "nothing but an articulate form of the disease: government force against persons to cure the evils caused by prior political intervention."

Sa indoctrination, ang tinutukoy ni Rev. Opitz na doktrina ay ang pananaw na ang gobyerno ay itinuturing na "proper and efficient means to accomplish the end of general prosperity and security for individuals against the uncertainties of modern life." Sa pamamagitan ng sapilitamg pagsusubo ng "social gospel or the welfare state idea", ang mga mag-aaral ay walang pagkakataon na mapakinggan ang ibang alternatibong pilosopiya. Ito ay magiging dahilan upang paniwalaan ng isang mag-aaral na ang "genuine concern for his fellows and for the good of society would lead a man to embrace the progressive extension of the functions and controls of government." At anumang pagsalungat sa pananaw na ito, ay ituturing na bunga ng pagiging makasarili.

Sa unknown case, ang nais tukuyin ni Rev. Opitz ay ang kawalan ng kabatiran ng mga mag-aaral ukol sa "classical liberalism" that "has long roots in the past and an impressive literature, and that it has a strong moral and intellectual case." Ito ay hindi natututunan ng mga estudyante sa kanilang "formal education." Sa halip, ang tanging itinuturo ay ang "caricature" ng pilosopiyang ito. Subalit base sa karanasan ni Rev Opitz, pagkatapos niyang maingat na suriin ang mga aklat ng mga "social gospellers and the welfare-staters," at pagkatapos niyang makipag-usap kay Dr. Bennett at sa mga kalalakihan na "professionally engaged on one or the other of the various church councils for social action," ay kaniyang napagtanto na ang dahilan kung bakit ang "libertarian case" ay hindi itinuturo sa mga seminaryo ay sa kadahilanan na ito ay hindi batid sa mga "theological circles!"

At sa panghuling punto ukol sa basic question, ito ay may kinalaman sa "Christian judgment" ukol sa limitasyon ng kapangyarihan ng pamahalaan. Subalit bago ito binanggit ni Rev. Opitz, ipinakita niya ang pagkakaiba sa pagitan ng lipunan at ng pamahalaan, at sa papaanong paraan makapaglilingkod ang pamahalaan sa lipunan: "The business of society is peace; the business of government is violence. So, the question is: What service can violence render to peace? The libertarian answer is that violence can serve peace only by restraining peacebreakers."

Dr. John C. Bennett 

Bilang katugunan, binanggit ni Dr. Bennett ang pagkakaiba ng kanilang "presuppositions" ni Rev. Opitz. Layunin ng kaniyang tugon na linawin ang ilan sa mga "misunderstandings" sa pagtukoy sa tatlong paksa: limited government, the essential element, and the main issue.

Naniniwala si Dr. Bennett na ang pamahalaan ay dapat na limitahan. Basic sa kaniyang kaisipan ang pagbibigay diin sa pagkakaiba ng estado sa lipunan. At ayon sa kaniya dahil sa ang lipunan ay binubuo ng maraming klase ng mga pagtitipon at ang pagsaklaw sa mga ito ng estado "is one of the greatest, perhaps the greatest, evil of our age." Binanggit niya na siya ay kaisa ni Rev. Opitz sa pagtutol sa "totalitarian state."

Para kay Dr. Bennett, "misleading" ang pagsasabi na ang essence ng state ay "coercion and violence." Ayon sa kaniya kinakailangan ang estado "to preserve public order." Dagdag pa rito, naniniwala siya na ang estado ay nabuo upang paglingkuran ang mga mithiin ng lipunan, at marami sa mga mithiing ito ay hindi nangangailangan ng paggamait ng "coercion" o "violence." Ipinaliwanag ni Dr. Bennett ang nais niyang tukuyin sa limitasyon ng kapangyarihan ng pamahalaan: 

"The state should be limited by its own law which protects the freedom of minorities, of individuals, of many kinds of association. The state should be limited by the recognition on the part of the citizens that there is a law above the state and above the national community as well. The state should be limited by a pluralistic structure within the state itself, with division of powers, the independence of the judiciary, the recognition that functions should be distributed between various regional political units."

Sa pagtalakay sa "essential element", ito ay may kinalaman sa pagkakaloob ng "educational opportunity" sa mga kabataan. Ayon kay Dr. Bennett, ito ay nangangailangan ng "coercion" upang maisakatuparan na may kaugnayan sa paniningil ng buwis, subalit ang "coercion" ay hindi ang "essential element" sa edukasyon. Para kay Dr. Bennett ito ay mas angkop na isalarawan bilang "constructive function" ng estado.

Pagdating sa huling paksa, ukol sa "main issue", ayon kay Dr. Bennett ang malaking pagkakaiba sa kanilang posisyon ni Rev. Opitz ay ang pagtingin sa kaugnayan ng estado sa kalayaan: "I think that the chief difference between us is that you regard the state as the chief enemy of freedom in all situations whereas I believe that the state may be an instrument of freedom for its citizens."

Binanggit ni Dr. Bennett na maraming mga kaaway ang kalayaan na tanging ang estado lamang ang may kakayanan upang sugpuin ang mga ito. Sa mga kaaway nito, tinukoy ng propesor particularly ang "business cycle" na ayon sa kaniya ay isang uri ng "coercion that results from the blind working of economic processes." Sa puntong ito kinakailangan ang estado upang maiwasan ang pagbulusok sa economic depression na magliligtas sa mga mamamayan "from the tyranny of circumstances that are beyond their control as individuals." Ito ay kinakailangan upang maiwasan ang paglitaw ng "totalitarianism" sa dahilan na base sa kasaysayan ang totalitarianism ay hindi nabubuo "through the gradual expansion of the functions of the state", sa halip ay lumilitaw sa panahon ng mga "catastrophes that are the result of the failure of weak states to deal adequately with the problems of the people."

Bilang babala, ayon kay Dr. Bennett ang policy na sinusundan ni Rev. Opitz at ng kaniyang grupo ay nakakatulong "indirectly" sa pagbuo ng kilusan tungo sa totalitariyanismo na kaniyang kinamumuhian. Ayon sa propesor, ang pananaw ni Rev. Opitz ukol sa estado ay lilikha ng "vacuum into which the advocates of totalitarianism may move."

Tinapos ni Dr. Bennett ang kaniyang katugunan sa mensaheng ito:

"It will require very great wisdom which is free from the dogmas of the right or the left to enable our country to steer a course in the next period that will use the state to help people preserve freedom from the tyranny of circumstances and from the tyranny of private centers of economic power without over-extending the activity of the state, especially without overcentralizing it."

English Version 

Source: Faith and Freedom April 1953 Issue

Thursday, October 30, 2014

Consumerism, Interventionism, and the Money Supply

Living in an anti-capitalistic era, it is common to hear even religious leaders who speak Marxist language. But of course they do it in a creative way for they don't want to be branded as leftists. In the US, they have left-wing religious leaders like Ronald Sider, Jim Wallis, and Jeremiah Wright. These men have many duplicates here in the Philippines. Even without understanding the basic principles of economics, these local counterparts are so vocal in their hostility and opposition against the free market. In fact, this first week of November, they will hold a seminar to attack consumerism, which in their mind is an offshoot of capitalism. 

Instead of being grateful for the development they see around them like the construction of big malls and the privilege of enjoying to dine in an eat all you can restaurant, they see going to malls as an escapade and consumption as materialism. Though they accept that capitalism has improved the material well-being of mankind, they complain that the minds of men were diverted from superior pursuits in life to inferior ones. They say that both consumerism and materialism tend to give attention only on the needs of the body, and neglect the needs of the soul and of the mind. And so people are deceived by the lure of consumerism. They echo the voice of Bernard Baruch: "The main purpose of the market is to make fools of as many men as possible."

David M. Walker, the US Comptroller General from 1998 to 2008 has something to say about "consumerism", or to be exact about the need to overcome the "consumption mind set." He said: 

"The individual must get over the CONSUMPTION MIND SET. The consequences are important and it is important that we reevaluate our values. That long standing tradition of children living better than their parents is in serious danger. We will have to reform all of our health care systems, our tax policy and social security. Over time we must restructure cutting spending, entitlements and enhancing revenues."

However, when David M. Walker said these words, he has basis. He is aware about the gross national debt and the unfunded liabilities of the US. He did not say those words in abstract or simply pointing the blame to the market. 

Blaming the market for consumerism is not based on economic analysis. It is more of a political propaganda to promote a statist ideology. defines consumerism in three ways: 

1. "a modern movement for the protection of the consumer against useless, inferior, or dangerous products, misleading advertising, unfair pricing, etc."

2. "the concept that an ever-expanding consumption of goods is advantageous to the economy."

3. "the fact or practice of an increasing consumption of goods."

In this article, I am using the term with its 2nd and 3rd definitions.

If consumerism is not the fault of the market, then whose fault is it? I think at this point the article written by Steven Horwitz at Foundation of Economic Education will help us. He said that it is erroneous to equate consumerism with capitalism simply because for economists consumption does not drive economic growth and prosperity, but production. For him, Keynesian economic policies are the primary roots of consumerism. Keynesianism manipulates "the elements of total income (consumption, investment, and government spending)" and they "became the focus of macroeconomic policy and economic development." And so his challenge for the Marxist critics of capitalism is that in their attack against consumerism, they should focus instead their attention on Keynesian interventionism.

Another economist confirms this observation. He provides a brief explanation how the increase in money supply affects consumption: 

"So here we see why an increase in the money supply leads to LOWER INTEREST RATES. With greater excess reserves, banks must lower the rate they charge each other . . . . in order to attract new borrowers and get their idle reserves out there earning interest for the bank." 

"LOWER INTEREST RATES create an incentive for firms TO INVEST IN NEW CAPITAL since now more investment projects have an expected rate of return equal to or greater than the new lower interest rate. Additionally, the LOWER RATES ON SAVINGS DISCOURAGES SAVINGS by households and thereby INCREASES THE LEVEL OF HOUSEHOLD CONSUMPTION. Households find it cheaper to borrow money to purchase durable goods like CARS and it also becomes cheaper to buy NEW HOMES or undertake costly HOME IMPROVEMENTS. So we begin to see INVESTMENT and CONSUMPTION rise across the economy as the increase in the money supply reduces borrowing costs and decreases the incentive to save. Aggregate demand has started to rise."
"Increasing the money supply . . . . leads to INCREASED CONSUMPTION, INVESTMENT, and NET EXPORTS, and therefore aggregate demand in the economy. The RISING DEMAND among DOMESTIC CONSUMERS, FOREIGN CONSUMERS, AND DOMESTIC PRODUCERS for the nation’s output puts UPWARD PRESSURE ON PRICES as the nation’s producers find it hard to keep up with the rising demand. Once consumers START TO SEE PRICES RISING, inflationary expectations will further increase the incentive TO BUY MORE NOW AND SAVE LESS, leading to even MORE HOUSEHOLD CONSUMPTION."

Based on the above quotations, since from an economic point of view, consumerism is an inevitable response of both the producers and consumers resulting from the increase in money supply, it is therefore fallacious to blame the free market for consumerism. Instead, blame those who are responsible for the increase of the money supply.

The Mystery of Banking

Usapang pera naman. Ano ang pera? Saan nanggaling ito? Anu-ano ang mga katangian na mayroon ang pera? Sinagot ni Murray N. Rothbard ang mga katanungang ito sa chapter 1 ng kaniyang aklat na "The Mystery of Banking." Bago natin sagutin ang mga tanong, tingnan muna natin ang kahalagahan ng aklat na ito.

Ayon kay Douglas E. French na isang banker, ang aklat na "The Mystery of Banking" ay ang tanging aklat na buong linaw na ipinapaliwanag ang sistema ng "fractional reserve banking", kung paano ito nagsimula at ang mga mapangwasak na epekto nito sa buhay ng tao (p. xi). Dagdag pa niya, bibigyang linaw din ng aklat na ito na ang "fractional reserve banking" ang tunay na salarin sa krisis na naganap noong 2008 (p. xii). 

Ayon naman kay Joseph T. Salerno, ipinapakita sa aklat na ang Federal Reserve ay isang "cartelizing device" na nililimitahan nito ang entry at nireregulate and kumpetisyon "within the lucrative fractional- reserve banking industry and stands ready to bail it out, thus guaranteeing its profits and socializing its losses." Ipinakita ni Rothbard na maraming nakikinabang sa sistemang ito kasama na ang mga "bankers," "incumbent politicians and their favored constituencies and special interest groups." Ang kapangyarihan na mag-imprenta ng pera ay ginagamit para sa kapakanan ng mga "vote-seeking politicians." Ang mga beneficiaries ng ganitong sistema ay kasama ang mga "Wall Street financial institutions, manufacturing firms that produce capital goods, the military-industrial complex, the construction and auto industries, and labor unions." (p. xxi). 

Wednesday, October 29, 2014

Ronald Reagan and Neoliberalism

In the article, "The Sad Legacy of Ronald Reagan" published at "The Free Market" in 1988, Sheldon L. Richman laments the unfortunate legacy of Ronald Reagan. He acknowledged that the world believed that Reagan was a staunch defender of limited government, liberty and free market. However, the forces behind interventionism was so strong that led Reagan to abandon his "free market position and acquiesced in further crippling" the American economy and liberties. To prove this argument, Richman dissected Reagan's track record, which includes government spending, taxation, regulation, bureaucracy, and trade. 

As to government spending, Reagan's administration spent higher than Carter's. Instead of fulfilling his promise to abolish the Dept. of Education and the Dept. of Energy, he doubled the budget of these two departments. Social Security spending increased from $179 billion to $269 billion, and Federal entitlements from $197 billion to $477 billion. Foreign aid also increased "from $10 billion to $22 billion", and so is the contribution to the IMF. The final outcome was the tripling of government debt "from $900 billion to $2.7 trillion."

In taxation, the "Tax Reform Act of 1986 is more deception than substance." 

In regulation, "some deregulation has occurred for banks, intercity buses, ocean shipping, and energy. But nothing good has happened in health, safety, and environmental regulations, which cost Americans billions of dollars, ignore property rights, and are based on the spurious notion of 'freedom from risk.'" As a whole, despite the talk about deregulation, "in fact, the economic costs of regulation have grown under Reagan." 

The size of bureaucracy has also grown and added "230,000 more civilian government workers. . . ."

In terms of trade, "The Reagan administration has been the most protectionist since Herbert Hoover's." "Ominously, Reagan has adopted the bogus fair-trade/free-trade dichotomy, and he was eager to sign the big trade bill, which tilts the trade laws even further toward protectionism."

The admirers of Ronal Reagan applaud him as the champion of limited government, free market, and personal liberty and "argue that he has changed the terms of public-policy debate, that no one today dares propose big spending programs." For Richman, Reagan brought no real change. Instead of shrinking the size of the government, he has caused it to grow even more.


William A. Niskanen in "Reaganomics" based Reagan's economic policy on four major objectives: 

(1) reduce the growth of government spending, 

(2) reduce the marginal tax rates on income from both labor and capital, 

(3) reduce regulation, and 

(4) reduce inflation by controlling the growth of the money supply. 

Niskanen has a different assessment of Reagan's legacy. For him, "Reagan delivered on each of his four major policy objectives, although not to the extent that he and his supporters had hoped." "The major achievements of Reaganomics were the sharp reductions in marginal tax rates and in inflation." However, "Reagan left three major adverse legacies at the end of his second term:"

(1) the privately held federal debt increased from 22.3 percent of GDP to 38.1 percent 

(2) the failure to address the savings and loan problem early led to an additional debt of about $125 billion. 

(3) the administration added more trade barriers than any administration since Hoover. 


In his September 29 article, Paul Verhaeghe of "The Guardian" describes neoliberalism as the EXISTING economic system "that rewards psychopathic personality traits that has changed our ethics and our personalities." It "has brought out the worst in us."

Verhaerghe associates neoliberalism with free market and privatization. In order to succeed under this economic system, you must possess the following qualities: 

(1) Articulateness. Disregard the superficiality of human interaction. The important thing is the ability "to win over as many people as possible." 

(2) Ability to "lie convincingly and feel little guilt."

(3) Ability to evade responsibility for personal behaviour.

(4) Flexibility and impulsiveness. You must always be "on the lookout for new stimuli and challenges. In practice, this leads to risky behaviour, but never mind, it won’t be you who has to pick up the pieces."

Verhaerghe accepts that his description of an individual under neoliberalism is "a caricature taken to extremes." However, his main concern is to paint a dark picture of neoliberalism by identifying the worst things that come out of us as result of this economic system:

(1) "The main preoccupation always being to extract more profit from the situation than your competition."

(2) "Social ties with colleagues weaken, as does emotional commitment to the enterprise or organisation."

(3) Bullying spreads from schools into the workplace. 

(4) "A buried sense of fear, ranging from performance anxiety to a broader social fear of the threatening other" is widespread.

(5) "Constant evaluations at work cause a decline in autonomy and a growing dependence on external, often shifting, norms." 

(6) "Adults display childish outbursts of temper and are jealous about trivialities, tell white lies, resort to deceit, delight in the downfall of others and cherish petty feelings of revenge."

(7) It caused serious damage on "people’s self-respect." 

(8) "Our society constantly proclaims that anyone can make it if they just try hard enough, all the while reinforcing privilege and putting increasing pressure on its overstretched and exhausted citizens."

(9) "We are forever told that we are freer to choose the course of our lives than ever before, but the freedom to choose outside the success narrative is limited."

(10) Neoliberalism "would have us believe that success depends on individual effort and talents, meaning responsibility lies entirely with the individual and authorities should give people as much freedom as possible to achieve this goal."

(11) Neoliberalism believes "in the fairytale of unrestricted choice, self-government and self-management are the pre-eminent political messages, especially if they appear to promise freedom."

So for Verhaerghe, neoliberalism "is the greatest untruth of this day and age."


Two articles were written as a response to Paul Verhaeghe. The 2nd article is just an extension of the 1st. I just want to mention the 2nd article first for there are ideas in it that I think are relevant. Ryan McMaken wrote this article on the 30th of September. Concerning the use of the word "neoliberalism", he states:

"Whenever you see someone use the word 'neoliberalism' you are probably dealing with someone who spends most of his or her time in a left-wing echochamber where people believe they are being oppressed by 'free markets' and that things will be set right only when the kind, calming hand of government is able to tame the vile 'free for all' that is people enjoying personal freedom." 

For McMaken, the fallacy of Paul Verhaeghe's argument is the mistaken identification of neoliberalism with the free transactions that characterize the market. He did not mean "the modern system of state-subsidized and controlled corporatism that actually prevails in the world today." And therefore Verhaeghe commits a serious mistake by saying that "neoliberalism" meaning the free market is the existing economic system today. 


The first response is more perceptive. The owner of the blog is Predrag Rajsic. At the outset, Rajsic acknowledges that his academic achievements are far below compared to Dr. Verhaeghe, but he is not worried for based on the logic of the professor, his lower achievements are good and the professor himself would be placed among the psychopathic for he is "a successful academic, close to the top of the academic achievement scale and pretty high in the general social structure." However, Rajsic avoids to think that way and considers that the professor "climbed to the top despite the goodness of his heart, and not because of some psychopathic personality traits on his part." 

After clarifying that part, Rajsik dissects the logic of the professor's argument on its own merit. Dr. Verhaeghe's conclusion that neoliberalism "rewards career and penalizes one's love for his family" is problematic on two points:

(1) "We don't know how other social systems perform in this regard. Did feudalism favour 'success' to a lesser extent than the system Dr. Verhaeghe is critiquing? How about communism? Were there fewer psychopaths at the top of the social structures in the communist/socialist Yugoslavia or the USSR than in the current system?"

Under the communist version of socialism, "Tito sent about 16 thousand political prisoners to something that looked more like a concentration camp than a prison. No one of the top Yugoslavian political or economic officials complained strongly enough to change this system. Did they exhibit more or less psychopathic tendencies than the people at the top of today's social structures in neoliberal societies?"

(2) Dr. Verhaeghe's conclusion that rewards and punishments are objectively determined outside of our minds is also problematic simply because "human choice is based on subjective valuations." "This means that the definition of success and failure is subjective. Each individual defines her own success."


Predrag Rajsic noted that the term "neoliberalism" has been abused. We need to study the historical formation of The Mont Pelerin Society in order to clarify the confusion that surrounds the use of the term "neoliberalism". Two additional articles written by Jörg Guido Hülsmann and Stephan Kinsella will help us achieve this.

Jörg Guido Hülsmann wrote "Against the Neoliberals" on May 2012. The article starts with a story about the formation of The Mont Pèlerin Society, and describes it as "an 'ecumenical' undertaking, bringing together purebred liberals of the classical tradition and neoliberals, who endorsed interventionist schemes to one degree or another." For Hülsmann, the role of Albert Hunold of Switzerland and Ludwig Erhard of Germany is vital to understand how neoliberalism dominated The Mont Pelerin Society.

Albert Hunold is a devout neoliberal and at the same time an admirer of F. A. Hayek's "Road to Serfdom". He was elected secretary of the society, and dreamed of becoming its president. Hostility arose between him and Hayek. The struggle between these two men became visible in 1958, "which for the first time brought a Mont Pèlerin Society meeting to the United States — to Princeton." During the next three years, the conflict between Hayek and Hunold "lurked beneath the surface. The conflict culminated "at the Kassel meeting in 1960" where "both Hayek and Hunold stepped down from their positions, but Hunold would become vice president of the society and wreak havoc for a while longer." The following year, the society was "to celebrate Mises's eightieth birthday, but Hunold turned it into yet another battle between neoliberalism and laissez-faire." "The Ordoliberals would soon be pushed into the background for a while; the power vacuum was not to be filled with Austro-libertarians, but economists from the Chicago School."

Another advocate of neoliberalism is Ludwig Erhard. His economic policies were favorably received in Germany. But for classical liberals such as Mises, "Erhard's success was problematic because it gave unwarranted credentials to his middle-of-the-road philosophy" and "was used to vindicate subsequent interventionist policies, in particular, antitrust laws and inflation."

Ludwig von Mises avoided to be involved in the company of neoliberals. He "did not have the highest opinion of most German economists." "He declined to write an entry for the new standard social-science dictionary, the Handwörterbuch der Sozialwissenschaften." He perceived the "Ordo School" as "Ordo-interventionists" and did not like to cooperate with them. 

Erhard's and the Ordo School's influence in Geremany was opposed by the classical liberals. "The leaders of this laissez-faire group were Volkmar Muthesius and Hans Hellwig." However, "Being denied professorships at the universities, their foremost means of action was Muthesius's journal, to which Mises contributed several articles."


Stephan Kinsella's article, "Capture of Mont Pelerin Society by Neocons" was published at in August 2008. The article includes some historical details not covered by Jörg Guido Hülsmann that will give light to the confusion that surrouns neoliberalism. 

Kinsella starts with his narration that "classical liberal economists were usually not employed in institutions of higher learning." So what they did was to build "other institutions from loose networks to political parties." "By 1860 governments realized the danger to themselves that the classical economists posed." As a response, they created "their own economists and thus control the market of ideas." Kinsella continues:

"This strategy was first applied in Germany with the German Historical School or 'Schmollerism' and soon spread to other countries, each with its own specific national feature. John Stuart Mill in Britain for example changed the meaning of liberalism into interventionism, while the Russian government thought that Schmoller was too tame and hired Marxist economists instead."
"This trend continued into the 20th century, with Ludwig von Mises being one of the very few setting himself against it. After demolishing the case for socialism and putting the case for radical liberalism, he insisted that no 'third way' was possible, as this would invariably lead to a loss of prosperity and in the end, socialism."
At this point, we return to the formation of Mont Pelerin Society. Kinsella identifies the composition of the ecumenical character of the society into four schools of thought: 

(1) Neoliberalism, i.e., practical and theoretical compromise with socialism; 

(2) F.A. v. Hayek, for whom a small amount of intervention was permissible; 

(3) Alexander Rüstow, who considered natural hierarchies as necessary for society; 

(4) and Ludwig von Mises, who stood for complete laissez faire.

As we already know from Jörg Guido Hülsmann, the Mont Pelerin Society was already dominated by neoliberalism through the influence of Albert Hunold and Ludwig Erhard. Kinsella confirms this: "Today, the MPS, a society of eminent scholars, mainly represents Neoliberalism."



Ronald Reagan is considered a champion of free market, limited government, and personal liberty, but in actuality due to interventionist forces, he gave up his free market position, and contributed to the expansion of the power of the State and bureaucratic management. 

As for neoliberalism, Dr. Paul Verhaeghe was mistaken to associate it with free market simply because the ruling economic system in the world today is interventionism. It is better therefore to distinguish between free market capitalism and crony capitalism. Free market capitalism is now represented by the Foundation for Economic Education, and Ludwig von Mises Institute and economists like Ludwig von Mises himself, Henry Hazlitt, Murray N. Rothbard, Ralph Raico, and George Reisman. If Jörg Guido Hülsmann and Stephan Kinsella's association of neoliberalism with interventionism is correct, then it is fair to say that out of this system, crony capitalism emerged, and therefore it is best represented by Mont Pelerin Society, the Chicago School and its most popular economist, Milton Friedman, "the 20th century savior of capitalism and champion of free market."

Thursday, October 23, 2014

Are we using language to confuse ourselves?

Too often in our time, the terms we use to organize our thinking are created by statist agencies and serve to mislead us. One such set of terms created by the IRS is "profit versus the non-profit." Profit-making activities are taxed. Non-profit enterprises and agencies are not. People come to classify activities in terms of these two terms. And so they describe reality instead of a statist-taxing category. Would it be not much more realistic if we classify things without reference to the IRS? If the IRS were to disappear in the next decade, how useful will these terms be? After all, they have referenced only to taxing. I submit that the terms "productive versus non-productive" are much more useful. Churches, schools and libraries are non-profit, but they are at the same time the most productive agencies civilization has ever known. To eliminate them would be to eliminate civilization.

Civil government is emphatically non-profit. Often it is not productive and . . . . But once kept within its limits can be productive of social order. The family is a non-profit community, but it is most emphatically a productive agency, and its decay is the decay of society and civilization. Because we have emphasized the profit versus the non-profit perspective, we have tended to falsify our view of life in every area: intellectual, industrial, and personal. We have downgraded the productive man in favor of the profiting man. Production has thus been displaced by an administration by the visible symbols of profitable power of church, universities, state and business, which have gained ascendancy over the productive mind and hand.

Religiously speaking, this means that form has been more important than substance. Pragmatism has replaced theology. When we look to the world through categories governed by the IRS, we have beggared ourselves intellectually and we have allowed the taxmen rather than the Lord our God to form our thinking. We need to remind ourselves of Saint Paul's words, "Study to shew thyself approved unto God, a workman that needeth not to be ashamed, rightly dividing the word of truth."

Note: This article is transcribed from RushdoonyTV

Wednesday, October 15, 2014

Sanhi at Resulta: Krimen at Kahirapan

Madalas na sinasabi na ang kahirapan ay ugat ng kriminalidad. Iminumungkahi ko na tingnan na ang krimen ay nagbubunga ng kahirapan.

Ang direktang nakararanas ng kahirapan ay ang mga biktima ng krimen kung sila ay pinagnakawan, pinagsamantalahan, o sinaktan. Bukod sa kanila, merong pang iba na apektado rin ng krimen bagamat hindi agad-agad na makikita ito. 

Ang mataas na antas ng krimen ay magiging dahilan upang lumisan ang mga negosyante sa isang lugar. Bunga nito, nawawala ang mga produkto at serbisyo na maaaring ibigay ng mga negosyo. Dagdag pa dito, nawawala din ang mga trabaho na dating ipinagkakaloob ng mga negosyong ito. Ang mga negosyanteng nagpasiyang manatili ay mapipilitang bawiin ang halagang mawawala bunga ng karagdagang bayad para sa seguridad o insurance bilang proteksiyon laban sa krimen sa pamamagitan ng pagtataas ng presyo ng kanilang mga produkto o serbisyo.

Ang halaga ng mga ari-arian ay bababa bunga ng mas maliit na pangangailangan sanhi ng kahirapan na mararanasan ng mga potensiyal na mamimili sa pagkuha ng mortgage loans.

Ang pagkawala ng produktibong gawain ng mga taong namiminsala sa iba ay nagpapababa rin sa "output" ng isang lugar. Kung magkagayon, sa isang lipunan na laganap ang krimen, ang pang-ekonomiyang pinsala na dulot nito ay hindi lamang sa mga direktang biktima nito kundi sa lahat ng mamamayan ng nasabing lipunan.

Kung papaanong mas gumiginhawa ang mga tao sa isang pamayanan na ang malaking bahagi ay mga edukado at mas produktibo, gayundin naman ang mga tao sa isang pamayanan na pinamumugaran ng mga kriminal ay lalong nasasadlak sa kahirapan.

Hindi lamang ang ibang mga tao ang nahihirapan ang buhay bunga ng krimen. Ang kalagayang pang-ekonomiya ng mga kriminal mismo ay apektado rin. Sila mismo ay pinipinsala ng kanilang mga gawi na gumawa ng krimen. Kung sila ay mahuhuli, gugugulin nila ang kanilang mga taon sa loob ng kulungan sa halip na sila sana ay naghahanap-buhay. Ang kanilang criminal record ay magiging sagabal sa kanila upang makahanap ng trabaho sa hinaharap. Nagkakaroon sila ng saloobin at pag-uugali na makakasama sa kanilang partisipasyon sa lugar ng trabaho. Sa mga kadahilanang nabangggit, isinasadlak ng mga kriminal ang kanilang sarili sa kahirapan.

Ang krimen ay isa sa pangunahing sanhi ng kahirapan. 


Note: Ito ay salin mula sa artikulo na isinulat sa wikang Ingles ni Roger M. Clites noong Marso 1, 1997 sa Foundation for Economic Education. Ito ay may pamagat ng "Cause and Effect: Crime and Poverty". 


Hindi pa nagtatagal, madalas nating nababasa na ang mga alagad ng batas ay sangkot sa iba't-ibang uri ng mga krimen. Isang balita ang ating nabasa nitong buwan ng Agosto na may kinalaman sa desiyon ng mga may-ari ng establisyemento sa kamaynilaan tulad ng mga hotel at restaurants na proteksiyonan ang kanilang mga negosyo. Bunga ng pagtaas ng bilang ng krimen, nararamdaman nila ang pagbaba ng kinikita ng kanilang mga negosyo. Dumadalang ang mga turistang bumibisita sa kanilang lugar. Yamang ang mga kapulisan ay lagi na lamang huli o mabagal tumugon sa krimen, kanilang napagpasiyahan na bumuo ng isang pangkat na magbibigay ng dagliang proteksiyon.

Ang ganitong pangyayari ay nakakapinsala sa ekonomiya ng bansa partikular sa industriya ng turismo. Hindi lingid sa ating kaalaman na maraming mga Koreano ang bumibisita sa ating bayan. Itong kamakailan, ilang mga Koreano na rin ang aking nakausap na sila ay nababahala sa seguridad ng kanilang mga kakabayan sa Pilipinas. Bagamat itinuturing nilang magandang pasyalan ang Pilipinas, ayon sa kanila, mas pipiliin pa nilang tumungo na lamang sa ibang mga karatig bansa sa Asya dahilan sa pangamba ukol sa kanilang seguridad. 

Isang Simpleng Paliwanag Tungkol sa Kahirapan

Matagal ng katanungan ng mga intelektuwal, mga politiko at mga religious leaders kung bakit maraming mga tao ay naghihirap. Iba-iba ang ibinibigay na mga katugunan. Ilan sa mga ito ay ang mga sumusunod:

1. Exploitation o pagsasamantala

2. Kasakiman

3. Slavery

4. Colonialism

Kung uugatin ang mga katugunang ito, iisa lang ang magiging konklusiyon - ang kahirapan ay isang komplikadong suliranin na nangangailangan ng masusing pag-aaral.

Sa totoo lang, simple lang ipaliwanag ang problema ng kahirapan. Halos sa buong kasaysayan ng tao, ang kahirapan ay kakambal na ng sangkatauhan. Nagkaroon lamang ng pagbabago sa kalagayan ng marami simula ng ika-19 na siglo hanggang sa kasalukuyang siglo. 

Ang kahirapan ng isang tao o ng bayan ay maaaring ugatin sa isa o mga pinaghalong kadahilanan:

1. Hindi nila kayang lumikha o gumawa ng maraming mga bagay na binibigyan ng mataas na pagpapahalaga ng iba.

2. Kaya nilang lumikha o gumawa ng mga bagay na binibigyan ng mataas na pagpapahalaga ng iba subalit sila ay pinipigilan para gawin ito.

3. Pinili nila na maging mahirap.

Isa sa popular na pananaw sa pagyaman ng isang bansa ay may kinalaman sa kasaganaan ng likas na yaman. Kung totoo ang pananaw na ito, disin sana'y ang Timog Amerika at Aprika ang pinakamayamang mga kontinente dahil sa kasaganaan ng kanilang likas na yaman. Ang tanong ay bakit sa kabila ng kasaganaan ng kanilang likas na yaman, ang mga pinakamiserableng mga tao ay nakatira sa mga kontinenteng ito? Sa kabilang banda, ang pananaw na ito ay pinasisinungalingan ng mga karanasan ng Japan, Hongkong, at Britanya na salat sa likas na yaman subalit kabilang sa pinakamayayamang mga bansa. 

Isa pang popular na pananaw kung bakit ang isang bansa ay naghihirap ay dahilan sa kolonyalismo. Ayon sa pananaw na ito, ang kahirapan ng mga bansang itinuturing na mga "third-world" ay bunga ng pagsasamantala at pagnanakaw ng mga likas na yaman ng mga bansang nanakop. Kung totoo ito, nakapagtataka bakit ang mga bansang mga dating kolonya tulad ng Canada, Australia, at New Zealand ngayon ay pawang mauunlad na? Ang Hong Kong na dating kolonya ng Britanya ay isa sa pinakamayamang bansa sa Malayong Silangan. Sa kabilang banda naman, ang mga bansang hindi nakaranas ng pananakop o kung nakaranas man ay napakaikling panahon lamang tulad ng Ethiopia, Liberia, Tibet, at Nepal ay maituturing na mga pinakamahihirap na mga bansa.

Ang isang nakalulungkot na katotohanan ay maraming mga bansa sa Aprika ang dumanas ng ibayong kahirapan simula ng sila ay magkamit ng kalayaan. Higit na maayos ang kanilang kalagayan sa ilalim ng kolonyal na pamamahala. Hindi natin nasaksihan sa ilalim ng mga kolonyal na pamamahala ang mga hindi maisalarawan na mga pang-aabuso sa karapatang pantao na nasasaksihan sa Burundi, Uganda, Zimbabwe, Sudan, at Somalia (Hindi ko sinasang-ayunan ang pagsasalaysay na ito ng may-akda sa dahilang maraming mga katibayan na nagpapatunay sa mga kahalintulad na pang-aabuso ng mga kolonyal na pamahalaan). 

Ang sinumang ekonomista na nagsasabi na alam niya ang buong sagot ukol sa mga sanhi ng kasaganaan ay dapat na pagdudahan. Hindi natin lubusang nalalaman kung bakit may mga lipunan na mas maunlad kaysa sa iba. Gayunpaman, maaari tayong bumase sa kaugnayan ng tatlong mahahalagang mga sangkap:

1. Sistema pang-ekonomiya

2. Karapatang pantao

3. Kinikita ng bawat tao

Sa sistema pang-ekonomiya, ito ay maaaring isailalim sa kategorya na mas kapitalista o mas komyunista. Mas kapitalista kung mas malaki ang sektor ng malayang pakikipagkalakalan. Mas komyunista kung mas malaki ang impluwensiya ng pakikialam ng pamahalaan at sentralisadong pagpaplano. 

Makatutulong ang Amnesty International upang malaman ang ranggo ng mga bansa ayon sa antas ng pag-abuso sa mga karapatang pantao. 

Sa World Bank income statistics naman ay matutunghayan ang mga ranggo ng mga bansa mula sa pinakamataas hanggang sa pinakamababa na kinikita ng mga tao. 

Pag pinag-ugnay ang mga impormasyon mula sa tatlong talaang ito, ating mapapansin ang kaugnayang ito: Ang mga bansa na higit ang kalayaang pang-ekonomiya ay higit na malakas ang proteksiyon sa mga karapatang pantao, at ang mga mamamayan ng mga bansang ito ay mas nakagiginhawa. 

Isang paraan ng pagsukat sa karapatang pantao ay ang pagsusuri kung hanggang saan pinoproteksiyonan ng pamahalaan ang kusang-loob na pagpapalitan at pribadong ari-arian. Ang sistema ng ekonomiya na nakabase sa pribadong ari-arian ay nagbibigay ng kakaibang insentibo kaysa sa sistema ng ekonomiya na nakabase sa kolektibong ari-arian. 

Yamang hindi pinahahalagahan ng mga collectivists ang pribadong ari-arian, mainam na ito ay ating suriin kahit bahagya lang. Kung ang karapatan sa ari-arian ay pribado, ang mga gastusin at mga pakinabang ng mga pagpapasiya ay nakatuon sa indibidwal na nagpasiya. Sa kabilang banda naman, kung ang karapatan sa ari-arian ay kolektibo, ang mga gastusin at mga pakinabang ng mga kapasiyahan ay kumakalat sa buong lipunan. Halimbawa, ang ekonomiya na nakabase sa pribadong ari-arian ay nagtutulak sa mga may-ari ng bahay na kanilang isa-alang-alang ang kanilang mga kasalukuyang desisyon sa maaaring maging epekto nito sa halaga ng kanilang mga tahanan sa hinaharap. Ito ay sa dahilan na ang halaga ng kanilang tahanan ay nakabase kung gaano pa tatagal ang serbisyo ng kanilang tahanan. Sa ilalim ng pribadong pag-aari, ang may-ari ng tahanan ay magiging responsable sa kaniyang mga desisyon upang mapangalagaan ang kaniyang tahanan.

Sa ilalim ng kolektibong pag-aari, iba ang magiging resulta. Kung pag-aari ng pamahalaan ang tahanan, ang isang indibidwal ay may mababang insentibo na ito ay pangalagaan sa kadahilanan na hindi siya ang lubusang makikinabang sa kaniyang mga pagpapagal. Kapwa ang bunga ng kaniyang pagpapagal at gastusin bunga ng pagpapabaya ay ikinakalat sa buong lipunan. 

Ang pagbubuwis sa pribadong ari-arian ay may ganito ring epekto. Pinapahina nito ang panlipunang responsibilidad. Kung ang pamahalaan ay magpapataw ng 75% buwis sa isang tao na nagbebenta ng kaniyang tahanan, papababain nito ang kaniyang insentibo na gamitin ito ng matalino.

Ang argumentong ito ay maaaring ilapat sa lahat ng mga gawain, kasama ang pagtatrabaho at pamumuhunan. Ang anuman na nagpapababa sa tubo o nagpapataas ng gastusin ng puhunan, sa una pa lang, ay nagpapababa rin sa insentibo na gawin ang pamumuhunan. Ito ay maaaring ilapat kapwa sa pantao at pisikal na kapital, mga gawain na nagpapataas sa produktibong kapasidad ng mga indibidwal. 

Sa makabuluhang antas, ang kayamanan ng mga bansa ay nakasalalay sa mga mamamayan nito. Ang pinakamainam na halimbawa ay ang mga bansang Hapon at Aleman. Pagkatapos ng ikalawang digmaang pandaigdig, halos nawasak lahat ang yaman ng dalawang bansang ito. Subalit ang pantaong kapital ay nanatili, ang kanilang mga kakayanan at edukasyon. Sa loob lamang ng dalawa o tatlong dekada, ang Japan at Germany ay kapwa muling bumalik bilang mga bansang may malalakas na puwersang pang-ekonomiya. 

Ang tamang pagkilala sa mga sanhi ng kahirapan ay lubhang napakahalaga. Kung ang paniniwala ng marami na ito ay bunga ng pagsasamantala at kasakiman, ang patakarang pang-ekonomiya na lilitaw sa ganitong pananaw ay ang muling pamamahagi ng mga kita, na ang ibig sabihin ay pagkumpiska ng pamahalaan sa "mga yamang kinuha sa masamang paraan" at "pagsasauli" nito sa mga tunay na may-ari. Ito ang politika ng pangingimbulo o pagkainggit. Nangangahulugan ito ng papalaking programa pantulong sa mga nangangailangan o mas kilala sa tawag na "welfare program".

Kung tama ang pagtingin sa sanhi ng kahirapan na walang iba kundi ang labis na pakikialam ng pamahalaan at kakulangan ng produktibong kapasidad, ang tiyak na magiging bunga nito ay paglitaw ng mga mabibisang patakaran. 

Note: Ito ay salin mula sa artikulo na isinulat sa wikang Ingles ni Walter E. Williams noong Abril 21, 2011 sa Foundation for Economic Education. Ito ay may pamagat na "Poverty Is Easy to Explain".

Thursday, October 9, 2014

Corruption and Suggested Solution

In a Facebook group, which main purpose is to combat corruption, the group admin asked a question about the origin of corruption and the way to solve it. In this article, I just want to share my response to that inquiry. I wrote it mostly in Filipino.


Outline of my Response

  • Isang maikling paglingon sa nakaraan ukol sa kalagayan ng Pilipinas at paglalapat nito sa kasalukuyan

  • Isang maikling pagtinging pilosopikal sa katutubong katangian ng pamahalaan

  • Pagtinging pilosopikal sa kapangyarihang politikal at korapsyon

  • The Filipino Politician

  • Mga talata sa Biblia 

  • Saan dapat magsimula? 

  • Mga mungkahing listahan ng mga aklat na magandang basahin 



Sa kasaysayan, sa panulat ng ating pambansang bayani na "The Philippines A Century Hence", nabanggit niya ang 3 mga pananaw ukol sa kalagayan ng mga Pilipino sa loob ng 300 taon at sa paglipas nito. Para sa mga Kastilang liberal, walang pagbabago. Para sa mga prayle, nagkaroon ng progreso at napalaya ang mga Pilipino sa pagka disibilisado. Subalit para sa higit na nakararami, kapinsalaan bunga ng pagkabusabos. 

Ang ganitong kalagayan ay nagbukas sa isipan ng marami na ang pamahalaang kastila ay hindi maaaring pagkatiwalaan at nais lamang nito na panatilihin ang bayan sa pagiging sanggol magpasawalang hanggan para sa pansariling kapakinabangan. Kaniyang napagtanto na siya ay hindi lamang pinagkakaitan ng wastong pagkain, bagkus ay nilalason upang mapigil ang kaniyang paglaki. At ito ay ginagawa sa iba't-ibang mga kaparaanan.

Ilan sa mga paraan na ginagamit ng pamahalaang kastila sa pagpigil sa pag-unlad ng bayan ay ang mga sumusunod: pagmamalupit sa masa sa pamamagitan ng simbahan, maling pangangasiwa ng edukasyon ng mga kabataan at mga depektibong aklat-aralin na ikinasusuya ng mga mag-aaral, pagpapanatili sa mga Pilipino sa kamangmangan sa pamamagitan ng mga ordinansa ng simbahan, pagpapahirap sa bayan, unti-unting paglipol sa mga mamamayan, at pagpapasimuno ng mga sigalot.  

Sa maikling pagtanaw sa nakaraan, 2 bagay ang ating mapapansin:

1. Ang kawalan ng kalayaan ay nagdulot ng malaking kapinsalaan.

2. Walang inisip ang pamahalaang kastila kundi ang sariling kapakinabangan. 

Mainam na pag-isipan natin sa papaanong paraan nananatiling angkop ang mga pangyayaring ito sa kasalukuyan. 

Una, ukol sa kaugnayan ng kalayaan at kapinsalaan. Maituturing na ang Pilipinas ay malaya sa larangan ng politika at kultura. Subalit malaya ba ang mga Pilipino pagdating sa ekonomiya? 

Ayon sa Freedom Barometer Asia 2013, ang mga variables para sukatin ang economic freedom ng isang bansa ay ang mga sumusunod: "security of property rights; size of government; regulation of credit, labour, and business; and, freedom to trade internationally." Nakalulungkot lang, dahil hindi nila isinama yong variable na "access to sound money" na sa tingin ko ay lubhang napakahalaga. Sa 17 mga bansa sa Asya, ang Pilipinas ay pang 8. Nangunguna ang Japan at nasa hulihan ang North Korea. Sa buong mundo naman, batay sa 2014 Index of Economic Freedom, ang Pilipinas ay pang 89. 

Ano ang kahalagahan ng mga impormasyong ito? Ayon kay Dr. John V. C. Nye, ang mga pangunahing problema ng Pilipinas ay may kinalaman sa presyo ng bilihin, hindi maaasahang "property rights and contracting", nakakasakal na bureakrasya, mga polisiya na "anti-investment" at "anti-competitive", at politikang pinapaboran ang pinakasamang paghahalo ng "populism", "elite rent-seeking", at "high-minded but unproductive nationalism". Ito ay base sa lecture niya na ang paksa ay "Why Quantitative Easing was good and should be better...and how the Philippines should benefit from it." Kung tama si Dr. Nye, malaki ang papel ng bureakrasya at mga anti-investment policies sa korapsiyon na siyang nagiging sagabal sa realization ng economic freedom ng mga Pilipino. 

Kung magkagayon, napakagandang makita na magkaroon ang Pilipinas ng mga statesmen na ang advocacy ay labanan ang ideyolohiya at mga pwersa na humahadlang para makamtan ang economic freedom. 

Ikalawa, ang pamahalaang kastila ay bahagi na ng nakalipas. Tayo ay pinamamahalaan na ng mga kapwa natin mga Pilipino. Subalit, bakit sa kabila na kapwa natin mga Pilipino ang namumuno sa atin, ay hindi pa rin natin makamtan ang ina-asam-asam na pagsulong? Baka naman nagpalit lang ang lahi na nanungkulan sa atin subalit nanatili pa rin ang pansariling interes? At marami tayong mga katibayan sa puntong ito na may mga politiko at mga bureakratiko na mahirap ipaliwanag ang kanilang dagliang pagyaman.  



Isang angulo na maganda ring tingnan ay ang may kinalaman sa ating saligang pagkaunawa sa tungkulin ng pamahalaan sa buhay ng mga mamamayan. Ang edukasyon ay pangunahing tungkulin ng pamilya at ang welfare naman sa kasaysayan nito ay ginagampanan ng mga pribadong sektor lalo na ng simbahan. Sa paglipas ng panahon, habang lumalaki ang Estado, lumalaki rin ang saklaw nito sa buhay ng tao na dati rati ay nasa kontrol ng mga pribadong mamamayan. Upang tustusan ang papalaking gastusin ng Estado, karagdagang buwis ang kailangan na ang ibig sabihin ay paglipat ng pananalapi mula sa kamay ng mga mamamayan tungo sa kamay ng pamahalaan. At dahil sa labis-labis ang pananalapi na dumadaan sa kamay ng pamahalaan, marami sa mga politiko at mga bureaukratiko ay natutuksong nakawin ang mga ito na nagbubunga ng kakulangan ng pondo para sa mga lehitimong tungkulin ng gobyerno tulad ng pagpapa-iral ng katarungan at pagbibigay ng proteksiyon sa buhay, kalayaan, at pribadong ari-arian ng mga mamamayan. Malaking kapinsalaan sa pananalapi ng mga mamamayan ang idinudulot ng isang pamahalaan na nais saklawan ang mga gawain na labas sa kaniyang lehitimong tungkulin. Maganda sanang makakita ng masusing pag-aaral sa epekto ng papalaking gastusin, paglaki ng pamahalaan at malaking buwis sa pagbabago ng antas ng pamumuhay ng mga mamamayan.



Wika ni Lord Acton, "Power tends to corrupt and absolute power corrupts absolutely." 

Ilang bagay ang nais kong pansinin sa quotation na ito. Una, bakit nasabi ni Lord Acton na ang kapangyarihan ay may kakayanan na gawing corrupt ang isang tao? Ito ay matamang sinuri ni Leonard E. Read sa artikulong "On Power and Corruption". Binanggit niya na maraming klase ng kapangyarihan kung kaya marami ring klase ang corruption. Pero sa lahat ng ito ang political power daw ang pinakamapanganib at ito ay bunga ng mga sumusunod na kadahilanan:

1. "Collective Irresponsibility". Ang ibinigay niyang halimbawa ay ang pagkakaroon ng personal na baril. Ang pagkakaroon ng sariling baril ay nangangahulugan ng pagkakaroon ng kapangyarihan subalit ito ay hindi mag-uudyok sa isang indibidwal na gumawa ng karahasan. Ipagpalagay na natin na ang taong ito ay likas na maawain sa mga mahihirap, hindi ibig sabihin na dahil siya ay may baril ay gagamitin niya na ito upang maging isang holdaper para lang magkaroon ng pera na maipantulong sa mahirap.

Subalit nag-iiba ang situwasyon pag ang mga taong ito ay na-organisa bilang isang kolektibong politikal. Ang dati rati na responsable at may prinsipiyo ay bigla na lamang nagbabago. At ang halimbawang nabanggit ni Read ay may kinalaman sa paghimok ng isang kolektibong politikal sa pamahalaan na buwisan ang mga hindi kilalang Pedro upang bigyan ng tulong na salapi ang kanilang mga napiling Pablo.

2. "Shifting the Blame". Papaanong nangyari na niyayakap ng isang tao ang isang pamamaraan sa kolektibong pagkilos na kinamumuhian niyan sa pribadong pagkilos? Bakit biglang nagkaroon ng dalawang pamantayan ng moralidad? Bakit ang pagkakaroon ng baril ng isang indibidwal ay hindi nagiging sanhi ng corruption subalit nahuhulog dito ang indibidwal pag ito ay naging bahagi na ng kolektibong pagkilos?

Isang dahilan na nabanggit ni Read ay ang kathang-isip na ang isang gawain na itinuturing na masama kung ginagawa ng isang indibidwal subalit maaaring ituring na mabuti kung ito ay sinasang-ayunan ng nakararami. 

Ikalawang dahilan ay ang pag-iisip na mapapawalang-sala ka pag ginawa mo ang isang bagay hindi sa ilalim ng iyong pangalan, kundi sa pangalan ng sangkatauhan, lipunan, o kapakanan ng nakararami. Sa pamamagitan ng ganitong kaisipan, makaiiwas ang isang tao sa kaniyang personal na responsibilidad. Siya ay nagiging "anonymous" sa likod ng kolektibong pagkilos.

Maaaring sa legal na pagtingin, ang ganitong indibidwal ay mapawalang-sala, subalit hindi sa pamantayang moral. Ang batas ay makapagbibigay ng kalayaan sa kaparusahan at maaaring gamitin na pantakip sa isang lantarang corruption.  

3. "The Real Source of Corruption". Hindi maaaring magkaroon ng corrupt na pinuno na walang pinagmumulan: maraming bilang na mga corrupt na mamamayan. Nagiging corrupt ang isang politiko dahilan sa pagsangguni sa nakakarami na ang tahasang kahilingan ay gamitin ang kapangyarihan ng pwersahan.

4. "The Sin of Silence by Those Who Know". Ang pananahimik ng mga taong nakababatid ng isang masamang pangyayari ay nangangahulugan ng pagsang-ayon at ito ay nagiging sanhi rin ng paglaganap ng korapsiyon. 



Sa aklat na " The Filipinos in the Philippines", binanggit ni Renato Constantino ang ilan sa mga dahilan kung bakit nagiging corrupt ang isang politiko 

1. Kawalan ng pribadong buhay at oras sa pag-aaral

2. Mababang sahod subalit mataas na antas ng pamumuhay 

3. Ang pagkahilig na ibigay ang kagustuhan ng lahat

4. Ang motibasyon na manatili sa kapangyarihan at gamitin ang kaniyang posisyon upang maging daan sa pagyaman.

5. At ang pananaw ng mga mamamayan sa politiko. 



Kung babasahin niyo ang 1 Samuel 8: 10-18, matutunghayan niyo na 5x binanggit ang phrase na "He will take. . . ." na tumutukoy sa kapangyarihan ng Hari. "He will take your sons. . . .", "he will take your daughters. . . .", "he will take the best of your fields. . . .", "he will take a tenth of your grain. . . .", and "he will take a tenth of your flocks. . . ." The power of the king is the power to take. This refers to the power of taxation. At ang sukdulang resulta ng kapangyarihan ng Estado na kunin ang pag-aari ng mga mamamayan nito ay nakasaad sa talatang 18: "When that day comes, you will cry out for relief. . . ." Ibig sabihin darating ang panahon na ang mga mamamayan ay lubhang mahihirapan na tustusan ang gastusin ng palasyo at sila ay dadaing sa Diyos.  

Bagamat sa kasalukuyan bihira na sa mga bansa na monarkiya ang umiiral na pamahalaan, subalit, ang prinsipiyo ng taxation ay hindi nagbabago at sa halip may mga bansa na tulad ng Pilipinas na ang buwis ay higit pa sa 10%. Karamihan sa mga mamamayan ay hindi nakikita ang kaugnayan ng malaking buwis sa pagbaba ng antas ng kanilang pamumuhay. 

Sa 1 Kings 12: 1-19, mababasa natin na malaki ang naging papel ng pagbabayad ng buwis sa pagkahati ng bansang Israel pagkatapos ng kamatayan ni Haring Solomon. Kung tama man o mali ang karaingan ng mga Hudyo nang panahong yan ay nangangailangan ng mas masusing pag-aaral. Sapat na sa puntong ito na ating pansinin na tinawag ng mga Hudyo na "heavy yoke" ang mataas na buwis na kanilang binabayaran. Ang kahilingan nila kay Haring Rehoboam ay pagaanin ang kanilang pasanin. Subalit hindi nakinig ang hari sa payo ng mga matatanda na naglingkod sa kaniyang ama, at sa halip ay sinunod niya ang payo ng mga kabataang lalake na naglilingkod sa kaniya. Sa madaling salita, sa halip na bawasan ang buwis ito ay lalo pang pabibigatin na naging dahilan ng paghihimagsik ng 11 tribo. 



Ang suliranin ukol sa korapsiyon ay maaaring tingnan sa iba't-ibang mga angulo. Tatlo sa mga angulong ito ay ang institusiyonal, personal, at kampanya pang-edukasyon. Ukol sa institusiyonal na pagtingin, ang mungkahi ko ay masusing pag-aralan ang aklat na "Bureaucracy" na sinulat ni Ludwig von Mises noong 1944. 

Ukol sa personal, nagsisimula ang lahat sa pag-iisip ng isang indibidwal. Hindi natin maaaring pakialaman ang isip ng iba sapagkat hindi naman natin lubusang nalalaman ang kaniyang kalagayan. Kung ang ating sarili nga ay hindi natin lubusang maunawaan, ang iba pa kaya? Iwasan ang kahinaan na gusto mong ituwid ang pag-iisip ng iba at tanggapin ang iyong limitasyon. Wala tayong magagawa para matakasan ng iba ang korapsiyon na kanilang kinabagsakan. Ang pinakamainam na magagawa ng isang indibidwal ay pag-aralan niya at sanayin ang kaniyang sarili papaano mapagtagumpayan ang korapsiyon. Kung magtagumpay siya dito, ibahagi niya ang kaniyang karanasan sa mga taong may kahalintulad na mithiin. Ang mahalagang punto ay ang pananaw na ang responsibilidad ko ay ang aking sarili. Sa aking pagtupad sa tungkuling ito, napaglilingkuran ko rin ang aking kapwa. 

Pagdating naman sa kampanyang pang-edukasyon, ang layunin ay ang pagkakaroon ng isang intelektuwal na kilusan. Pag-aralan ng masusi ang mga teorya pang-ekonomiya at mga paksa na may kinalaman sa free market, limited government at personal and economic freedom. Pagkatapos na ito ay pag-aralan, ibahagi ito sa publiko. Kung may kakayanan sa pananalapi, mainam tustusan ang pagpapalaganap ng mga aklat na may kinalaman sa mga paksang ito sa mga kolehiyo at mga unibersidad. Pag naging matagumpay ang ganitong uri ng intelektuwal na kilusan, ito ay magsisilbing saligan ng isang maunlad at mapayapang lipunan. 

Higit sanang mainam kung meron tayong mga politiko na tunay na mga "statesmen" na ayon kay Lawrence E. Reed ay nagtataglay ng mga sumusunod na katangian: 

1. Tinatayuan niya ang isang pangarap base sa prinsipiyo, hindi base sa kung ano ang gusto ng nakararami

2. Siya ay patuloy na nagsasaliksik sa katotohanan at handang gawin kung ano ang tama hindi kung ano ang popular sa kasalukuyan

3. Malinaw ang kaniyang posisyon sapagkat "he says what he means and means what he says."

4. Itinataas niya ang antas ng pampublikong talakayan sapagkat batid niya kung ano ang kaniyang mga sinasabi.

5. Hindi siya nakikilahok sa "class warfare" o iba pang mga pamamaraan upang paghiwalayin ang mga mamamayan. 

6. Sinusukat niya ang kaniyang tagumpay sa kaniyang tungkulin hindi lamang sa mga batas na kaniyang naipasa, kundi sa mga batas na kaniyang napawalang bisa o tinanggihan.

7. At higit sa lahat, hindi niya ginagamit ang buwis para bilhin ang boto ng mga mamamayan.



1. Economics in One Lesson by Henry Hazlitt

2. The Law by Frederic Bastiat

3. Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises

4. Pillars of Prosperity: Free Markets, Honest Money, Private Property by Ron Paul

5. Bureaucracy by Ludwig von Mises

A Stronger USD?

"Federal Reserve officials want to tie an interest-rate rise to U.S. economic progress, but the minutes of their last policy meeting show they are struggling with how to come to grips with the dual threats of a stronger dollar and a global slowdown." 

"'The Fed is becoming increasingly focused on the potential impact of the stronger dollar on the domestic economy at a time when the global growth momentum is beginning to slow, and the uncertainties this is adding to the economic outlook,' said Millan Mulraine, deputy head of research and strategy at TD Securities."

". . . . strengthening dollar could hurt the economy. . . ."

"The Fed acknowledged the market seems behind in this regard and suggested it could complicate matters when the time comes to raise rates."


Talk of "economic progress" and "stronger dollar". I found a similar mindset in South Korea. To me, the "strengthening of the dollar" shows that the nations' central banks aiming to protect their own domestic economies are also inflating their money supply. Hence, the race to the bottom is entering another level. I read in this a signal that in the US more stimulus package is coming if not in few months, perhaps early next year. The market is the guilty party here. I just wonder what market does Reuters refer to? 

Economic Recovery?

"The South Korean government plans to inject an additional 5 trillion won ($4.7 billion) worth of policy funds this year to jumpstart the slowing economic recovery, the Finance Ministry said Wednesday."

"On Tuesday, the Bank of Korea said Korea was likely to continue to recover modestly, backed by a global economic recovery and ongoing economic policies."


Why is the "economic recovery" slowing in the first place? Or to ask a more realistic question, is there really a slowing economic recovery? If such an economic recovery exists even though it is slow, it remains a good news. However, this is the reality as a Keynesian economist sees it. I guess an Austrian economist would see it differently. No economic recovery is taking place. What a Keynesian economist sees as the slowing of economic recovery is actually the gradual disappearance of the impact of previous "economic solution" to boost the economy. And since such impact is disappearing, what is needed this time is for more stimulus package to "boost the economy". In reality, this is an act of stopping the market from correcting the economy and instead prolonging the "illusion of growth". The authority can do it as a short-term solution, but its long term impact is far more serious and destructive that may end in a possible humanitarian crisis. The truth is, no economic recovery is happening. We are still in the midst of economic crisis, not only South Korea, but the world. However, governments refuse to accept it, and they are using the only weapon they know to "boost the economy", injecting paper money into the economy through the nations' central banks. 

In South Korea, expect the weakening of won and the strengthening of export industry in the coming months. This is what they call "speeding" the economic recovery. To my knowledge, Austrians call it "joining the race to the bottom".